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Announcement of the Standing Committee of the Tenth Peoples Congress of Jiangsu ProvinceNo.139 The Regulations of Jiangsu Province on Democratic Management in Enterprises, adopted at the Thirty-second Meeting of the Standing Committee of the Tenth Peoples Congress of Jiangsu Province on September 27, 2007, are hereby promulgated and shall enter into effect as of January 1, 2008. September 27, 2007 Regulations of Jiangsu Province on Democratic Management in Enterprises (Adopted at the Thirty-second Meeting of the Standing Committee of the Tenth Peoples Congress of Jiangsu Province on September 27, 2007) Chapter I General Provisions Article 1 These Regulations are enacted in accordance with the Labor Law of the Peoples Republic of China, the Trade Union Law of the Peoples Republic of China and the Company Law of the Peoples Republic of China, in light of the specific situation of this Province, and for the purposes of establishing stable and harmonious labor relations, protecting the democratic rights of workers and promoting the development of enterprises. Article 2 These Regulations shall apply to the enterprises practicing democratic management within the administrative region of this Province. Article 3 Democratic management practiced in an enterprise shall be conducted in adherence to the principles of being conducive to the protection of the legitimate rights and interests of the staff and workers and being conducive to the development of the enterprise. The enterprise shall establish the democratic management system, organizing the staff and workers to participate in the management through such means as the workers congress, negotiation on equal standing and collective contracts, membership of worker directors and worker supervisors, and making public of enterprise affairs so as to ensure that the staff and workers can exercise their democratic rights The staff and workers shall exercise their democratic rights according to law and support the operation and management carried out according to law by the enterprise. Article 4 The local peoples government at or above the county level and its departments such as labor administration shall exert guidance, inspection and supervision on the democratic management in the enterprise according to law. The local federation of trade unions and the industrial unions shall assist the peoples governments at or above the county level in guiding and helping the enterprise to carry out democratic management, and impose supervision according to law. The trade union of an enterprise shall actually organize the staff and workers to carry out democratic management activities. The three parties made up by the labor administration department, the local federation of trade unions and the representatives of the enterprise for coordination of labor relations shall make researches to settle the major problems relevant to democratic management in the enterprise in a joint way. Chapter II Workers Congress of the Enterprise Article 5 The system of workers congress shall be established in the enterprise. Workers congress is the basic form for the enterprise to carry out democratic management. Democratic centralism shall be implemented for the workers congress. The enterprise with the establishment of branch companies or factories may convene workers congress at different levels. The enterprise with more than 100 workers on its staff shall convene the workers congress; the enterprise with less than 100 workers on its staff may convene a general meeting of all staff and workers to exercise the various functions and powers provided in these Regulations for the workers congress. Article 6 The workers congress shall exercise the following functions and powers: (1) deliberating and approving the drafts of collective contracts and the drafts of special collective contracts concerning occupational safety and health, protection of the rights and interests of women workers and wage regulation mechanism; (2) electing the negotiation representatives who will represent the staff and workers to participate in the negotiation on equal standing, the worker directors and the worker supervisors, and listening to their report on fulfillment of their duties; (3) discussing the drafts of rules and regulations or plans on major issues of immediate interest to the staff and workers concerning labor remuneration, working hours, rest and vacations, occupational safety and health care, insurance and welfare, vocational training, labor disciplines, and labor quota management, and bringing forth suggestions; (4) bringing forth opinions and suggestions on the operation management and labor management of the enterprise; (5) collecting representatives bills and reasonable proposals for the workers congress on issues concerning the operation management of the enterprise and the life welfare and benefits for the staff and workers; (6) supervising the enterprise executing labor laws and regulations, making public of the enterprise affairs, performing the collective contracts and labor contracts, carrying out the resolutions of the workers congress and handling the bills presented at the workers congress; (7) other rights as provided by the laws and regulations. Article 7 In addition to the functions and powers provided in Article 6, the workers congress in a state-owned enterprise, collectively-owned enterprise, state-holding enterprise or collectively-holding enterprise shall also exercise the following functions and powers: (1) hearing and deliberating the major decisions on production and operation management of the enterprise, the implementation plans on restructuring , reorganization, bankruptcy and staff cut-down of the enterprise, and the reports on labor remuneration and integrity of the middle and high level managerial personnel of the enterprise; (2) approving the plans on major issues concerning labor remuneration, working hours, rest and vacations, living and welfare, rewards and punishments, staff cut-down, reassignment and settlement of staff and workers in the restructuring of the enterprises which are of immediate interest to the staff and workers; (3) democratically appraising and supervising on the middle and high level managerial personnel of the enterprise and bringing forth opinions and suggestions. Workers congress in a collectively-owned enterprise has the right to elect and dismiss the middle and high level managerial personnel of the enterprise, formulate and revise the articles of association of the enterprise, and make decisions on major issues concerning operation management of the enterprise. Article 8 The staff member of an enterprise has the right to elect and to be elected as the representative of the workers congress. The representative of the workers congress shall be directly elected by the staff and workers. He may campaign for the qualification and may continue to serve his post at the expiration of his term if he is reelected. When an election is going on, constituencies shall be set up based on the division of branch companies, branch factories, workshops, sections or offices. In case more than half of the staff and workers in a constituency are not satisfied with a representative of the workers congress in performing his duties, they shall report to the trade union of the enterprise to recall his qualification according to the procedures. Where a representative of the workers congress severs or terminates his labor relation with the enterprise according to law, his qualification as the representative shall be terminated accordingly. Article 9 The number of the representatives of the workers congress shall be determined according to the following provisions: (1) where an enterprise with less than 100 workers on its staff convenes the workers congress, the number of the representatives shall not be less than 30; (2) in an enterprise with not less than 100 but not more than 1000 workers on its staff, the base number of the representatives shall be 40 and the number of the representatives shall increase by 7 with every increase of 100 workers on its staff; (3) in an enterprise with not less than 1000 but not more than 5000 workers on its staff, the base number of the representatives shall be 100 and the number of the representatives shall increase by 25 with every increase of 1000 workers on its staff; (4) in an enterprise with more than 5000 workers on its staff, the number of the representatives shall not be less 200. Where these is a considerable change in the number of the staff and workers during the term of the workers congress, the number of the representatives shall be adjusted according to the provisions in the preceding paragraphs, and the trade union of the enterprise shall report the matter to the trade union at the next higher level for record. The number of board members, executing directors, and middle and high level managerial personnel shall not exceed 20 per cent of the total number of the representatives in the workers congress. The number of female representatives shall be in appropriate proportion to that of the female staff and workers. Article 10 The representative of the workers congress shall perform the duty of representative according to law, reflect the opinions of the staff and workers truthfully, report to the staff and workers in his constituency the work of the workers congress and his own performance of his duties as the representative and accept the democratic supervision conducted by the staff and workers. Where a representative of the workers congress attends various events organized by the workers congress at the cost of his working time, he shall be deemed to have delivered normal labor service. Article 11 The workers congress is elected for a term of 3 or 5 years, which is the same as that of the trade union of the enterprise. Once approved by the trade union at the next higher level, the workers congress may advance or postpone the election for a new congress, but the time advanced or postponed shall not be more than half a year. Article 12 The workers congress shall hold at least one meeting a year. The topic of the meeting shall be determined by the trade union of the enterprise in consultation with the operators of the enterprise after soliciting opinions from the staff and workers. When proposed by more than one third of the representatives, the trade union or the operators of the enterprise, a temporary workers congress may be convened. Article 13 The workers congress shall not be convened unless it is attended by more than two thirds of its representatives. Its elections, resolutions and approvals shall be passed with the assent of more than half of the representatives. Matters that shall be approved by the workers congress as provided in these Regulations shall be done so through secret ballot. Article 14 The decisions and approvals made by the workers congress within its scope of functions and powers are binding on both the enterprise and the staff and workers. The enterprise shall report to the workers congress every year on its implementation of the decisions of the workers congress. The enterprise shall submit the matters within the scope of functions and powers of the workers congress to the congress for its deliberation and approval. The workers congress shall support the board of shareholders, board of directors, board of supervisors and high level managerial personnel such as managers in exercising their functions and powers according to law. Chapter III Regional Workers Congress and Industry Workers Congress Article 15 In areas where small enterprises are concentrated, the staff and workers of the enterprises may be organized to participate in the democratic management activities by the regional trade unions of towns and townships, streets, villages, communities, development zones and industrial parks, or industry trade unions under the county level through convention of regional workers congress or industry workers congress. Article 16 The regional workers congress and the industry workers congress shall exercise the following functions and powers: (1) hearing and discussing the reports on economic development, labor and services, enterprise management and social security within the region or the industry, and bringing forth opinions and suggestions; (2) deliberating and approving the drafts of the general collective contracts for the region or the industry and the drafts of special collective contracts concerning occupational safety and health, protection of the rights and interests of women workers and wage regulation mechanism; (3) supervising the enterprises concerned within the region or the industry executing the labor laws and regulations, making public of enterprise affairs, performing the collective contracts and labor contracts and carrying out the resolutions of the workers congress. Article 17 The representatives of the regional workers congress or the industry workers congress shall be nominated democratically in an appropriate proportion and elected directly by the staff and workers of the enterprises in the region or the industry. Enterprise operator representatives shall not exceed 20 percent of the total number of the representatives in the regional or industry workers congress. The person in charge of the regional trade union or the industry trade union, the person in charge of the trade union of an enterprise, and the person in charge of the women worker committee of the trade union of an enterprise shall be nominated as the candidates for the representatives. Chapter IV Worker Directors and Worker Supervisors Article 18 There shall be worker directors on the board of directors of a wholly state-owned company or a limited liability company set up by not less than two state-own enterprises or not less than two state-owned investment entities, the number of which shall be prescribed in the articles of association of the company. There may be worker directors on the board of directors of other limited liability company or a joint stock company. There shall be worker supervisors in an appropriate proportion on the board of supervisors of a limited liability company or a joint stock company. The proportion shall be prescribed by the articles of association of the company, but may not be less than one third of the total number of members on the board of supervisors. Article 19 Worker directors and worker supervisors shall be elected democratically by the staff and workers of the company through means such as the workers congress or the general meeting of workers. The person in charge of the trade union of the company shall be among the candidates for worker directors and worker supervisors. Senior managerial personnel of the company shall not be listed as candidates for worker directors and worker supervisors. Article 20 When exercising their functions and powers in the board of directors and the board of supervisors, worker directors and worker supervisors shall enjoy equal rights and perform equal duties as other members on the board of directors and supervisors. Worker directors and worker supervisors shall listen to the opinions and suggestions of the staff and workers, reflect their opinions truthfully, accurately and thoroughly when participating in the decision-making of or supervision on the company, report to the workers congress on their participation in the decision-making or supervision, and accept the supervision from the staff and workers. Chapter V Making Public of Enterprise Affairs Article 21 The enterprise shall make public to the staff and workers the following issues for their democratic supervision: (1) articles of association of the enterprise, and regulations and rules concerning labor remuneration, working hours, rest and vacations, occupational safety and health care, insurance and welfare, vocational training, labor disciplines, and labor quota management which are of immediate interest to the staff and workers; (2) development planning and business operation situation of the enterprise with exception of the classified trade secrets; (3) negotiation on equal standing and the signing and performance of collective contracts; (4) labor management and the signing and performance of labor contracts; (5) payment of social insurance premiums, house accumulation funds, supplementary insurance premiums and enterprise annuity for the staff and workers; (6) issues concerning vocational safety and health and protection of the rights and interests of female workers; (7) rewards and punishments for the staff and workers, and staff cut-down programs; (8) other issues provided by laws, regulations and the articles of association of the enterprise. State-owned enterprises, collectively-owned enterprises, state-owned and collectively-owned holding enterprises shall also, with exception of the trade secrets, make public major decisions on investment and business operation of the enterprise, important technological renovation plans, annual production and business operation targets and attainment of such targets, utilization of large amount of funds, the tendering and bidding of construction projects, bulk purchasing and supplying, major change of the ownership of enterprise assets, and the employment and appointment of middle and high level managerial personnel. Article 22 The enterprise may publicize its affairs in the following ways: (1) convening the workers congress; (2) having worker directors or worker supervisors on its board of

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